annual results for the 12 months ended december

annual results for the 12 months ended december 2004 (formerly Iscor Limited) A member of Mittal Steel Company

Davinder Chugh chief executive office r

Overview n Record earnings of R 4 541 m (1 019 c per share) - International steel prices attain all time high levels - Strong domestic demand growth - Cost escalations successfully contained n New business strategy gains momentum n Member of the most global & largest steel group in the world Created substantial shareholder value 3

Key Result Drivers n Increase in HRC US$ price 50% n Growth in domestic sales volume 22% n Increase in HRC cash cost per tonne (Rand) 3% n Strengthening of Rand (average exchange rate) 17% * Excluding BAA remuneration (1 H’ 04) Captured benefits of market while containing costs n Operating margin* 4

Invoiced Export Prices Ispat Iscor invoiced prices (c&f) US$/t 700 Hot rolled coil Low carbon wire rod 600 500 400 300 200 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Source: Ispat Iscor Paradigm shift in steel price cycle 5 2004

Global Market Tonnes x 1 000 1 170 1 120 Supply Demand 1 070 1 020 970 920 870 820 2001 Source: World Steel Dynamics/CRU Stable 2005 expected 2002 2003 2004 2005 2006 Note: Apparent Steel Demand Supply 6 2007

Global Market Trends n Global steel demand may continue to outstrip supply in 2005 n Chinese economy growing at slower rate n World economic growth is expected to continue n Consolidation amongst steel companies globally gains momentum n Steelmakers’ input costs will remain high 2005 average prices expected to remain firm 7

Geographic Sales South Africa Rest of Africa Total Africa Far East European Union North America 2003 2004 Middle East % 0% Market optimisation 10% 20% 30% 40% 50% 60% 70% 8 80%

Domestic Market Imports % ’ 000 t 1 700 14% Quarterly consumption Steel imports Consumption trend 1 500 12% Consumption 8% 1 100 6% 900 4% 700 2% 500 1980 0% 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 Source: SAISI Domestic sales up 22% in 2004 9 2004 Imports 10% 1 300

Global Input Cost Based to 100 140 Coking coal – Contract Iron ore fines – Contract 130 120 110 100 90 80 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Source: Coal Rush report/Tex report Bulk commodity costs drive high steel prices 10

Global Input Cost Based to 100 700 600 Freight rates Coke Scrap 500 400 300 200 100 0 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Source: Baltic Exchange/Tex report/Metal Bulletin Other process inputs also maintaining high levels 11

Global Input Cost Trends n Iron ore expected to increase substantially in 2005 n 05/06 Metallurgical coking coal contracts settled at approx +125% n Freight rates more stable, but at high levels n Coke stabilising around $250/t after peaking at > $400/t in 2004 n Scrap prices expected to remain firm in 2005 n Supply chain bottle-necks addressed through various Source: World Steel Dynamics expansion projects internationally High input costs likely to support firm steel prices 12

Input Cost Positioning Tonnes ’ 000 Domesti c supply Imported agreeme nts 4% 5% 1% - Iron ore - DRI 9 470 1 401 Backwa rd integrat ed 91% 99% Scrap 1 818 78% 22% - Coke 2 184 96% 3% 1% 2 673 15% 22% 63% 1 754 - 100% - - Coking Coal Other Coal Actual 2004 data Cost benefit from integration on most inputs 13

Key Performance Indicators 2003 2004 % change 316 1 053 +233 2. 3 8. 0 +248 12 539 4. 1 1 474 1 696 11 416 3. 7 2 019 1 756 -9 -10 +37 +3 226 275 +22 Billet cash cost - R/t 1 509 1 613 - US$/t 201 253 +26 41 57 +39 61 74 +21 CI savings (Rm) - percentage Number of full-time employees Man hours per ton steel Revenue per head (R 000) HRC cash cost - R/t - US$/t Percentage value-add exports - flat - long Continuous productivity improvement 14 +7

Liquid Steel Production ’ 000 t 7 500 7 085 7 033 2004 6 000 4 500 3 681 3 628 3 000 1 500 1 251 1 227 2003 2004 2 153 2 178 2003 2004 0 2003 2004 Vanderbijlpark Saldanha Long products Production affected by Conarc burn-through & planned shutdowns Total 15

Liquid Steel Production Loss Liquid steel (‘ 000 t) n Planned production stoppages - Blast Furnace C throat armour repair at Vanderbijlpark 64 - Blast Furnace D interim repair at Vanderbijlpark 207 n Unplanned production stoppages - Conarc burn-through at Saldanha 67 n Production recovered & other efficiency improvements 286 16

Sales Volumes ’ 000 t 7 000 6 000 Export Domestic 6 259 6 201 3 086 2 323 3 173 3 878 2003 2004 5 000 4 000 3 173 3 166 1 310 943 3 000 2 000 1 863 2003 1 187 1 141 833 637 2 224 2004 Vanderbijlpark Strong domestic sales growth 354 503 2004 Saldanha 1 899 1 894 943 743 956 1 151 2003 2004 Long products Total 17

Environmental n Iscor Coke & Chemical (ICC) achieved ISO 14001 in 2004 n Now all operations ISO 14001 certified n Major environmental projects in progress: Cost Rm - Vanderbijlpark - Planned Completion - Cleaning of coke ovens gas 306 1 H/06 Zero effluent discharge (main treatment plant) 222 2 H/05 New sinter plant off-gas system 210 2 H/07 - Coke oven repair project Reverse osmosis plant 50 - Newcastle 231 1 H/06 completed n Total planned environmental spend of R 964 m Environmental improvement gains momentum 18

Other Major Projects n Newcastle - Pulverised coal injection (on schedule) 1 H/05 n Vanderbijlpark - BOF control systems 112 completed - Blast Furnace C – throat armour repair completed - Blast Furnace D – interim repair 139 - Sinter plant repair and upgrade (Phase 1 -3) completed - New DRI kilns 432 1 H/06 - Blast Furnace D –stoves (2 months behind) 2 H/06 n Saldanha - Third roll grinder 30 Significant drive for efficiency improvements 211 23 completed 42 318 completed n Iscor Coke & Chemicals - Market coke expansion 455 * Still to be approved Planned completion Cost Rm 2 H/06 19

Vaidya Sethuraman executive director fin ance

Headline Earnings Rm 2003 Revenue 18 487 Comparable operating profit 3 375 Financing cost - net interest expense (47) - long-term provision top-up (81) Tax (1 100) Equity earnings* 115 Minority interest (2) Comparable earnings 2 260 - in US$m 301 BAA remuneration* (429) Restructuring costs* (116) (110) Power contract settlement* Headline earnings 1 605 * After tax 2004 +25 +119 23 053 7 399 36 (170) # (2 465) 258 (6) 5 052 793 (511) +124 +163 +19 4 541 +183 # Lower discount rate accounts for R 100 m Record earnings % change 21 -110 -124 +124

Comparable Headline Earnings Trend Rm 1 800 1 575 1 600 1 415 1 393 1 400 1 200 1 000 800 657 600 596 655 669 4 Q/03 1 Q/04 352 400 200 0 1 Q/03 2 Q/03 3 Q/03 Quantum jump in quarterly earnings 2 Q/04 3 Q/04 22 4 Q/04

Operating Profit Rm Vanderbijlpark Saldanha Steel Long products Coke & Chemicals Other Corporate Comparable operating profit BAA remuneration Restructuring costs Power contract settlement Operating profit Steel prices & cost containment boost profits 2003 2 179 379 777 172 10 (142) 3 375 (613) (166) (157 2 439) 2004 % change 4 129 1 147 1 769 462 42 (150) 7 399 (731) +89 +203 +128 +169 +320 -6 +119 +19 6 668 +173 23

Cash Flow Rm 2003 2004 4 245 8 563 Working capital (219) (1 410) BAA remuneration (613) (731) 3 413 6 422 84 14 (1 278) (1 254) (43) 36 (1 135) (886) (892) (339) 149 3 993 Cash profit from operations Cash from operations Asset sales Capex Finance cost Tax Dividends Net cash flow Strong cash flow 24

Working Capital Rm 2003 2004 Inventories 36 (288) Debtors 57 (1 128) Creditors (312) 6 Total (219) (1 410) Higher working capital driven by local volume & prices 25

Financial Ratios 2003 2004 Operating margin (%) - on comparative basis (%) * 13 18 29 32 EBITDA margin (%) - on comparative basis (%) * 18 23 33 36 Revenue/invested capital (times) 1. 3 1. 5 Return on equity (%) - on comparative basis (%) * 13 18 31 35 Net cash/equity (%) 0. 2 24. 8 * Adjusted for once-off items Continuous improvement in performance 26

Share Performance % Movement 140 120 Iscor All shares Top 40 100 80 60 40 20 0 -20 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Source: Standard Bank Outperforming the market 27 Nov Dec

BAA Update Rm n Annualised cost saving for 2 H/04 - Payments to Mittal Steel 926 NIL n Cumulative realised saving 2002 to 2004 1 985 - Payments to Mittal Steel 1 344 n Management will review & recommend to the Board, a new contract to replace expired one, which will be subject to approval of shareholders, other than Mittal Steel Sterling contribution to our cost reduction programme 28

Dividend n Dividend policy - Considering the cash position, future capital expenditure & working capital requirements - Distributing one third of headline earnings before once-off charges n Dividend declared - Interim dividend of 300 cents per share – 17 December 2004 - Final dividend of 100 cents per share – 8 February 2005 - Total dividend of 400 cents covered 3 times by adjusted EPS of 1 133 cents 29

Davinder Chugh chief executive office r

Strategic Goals n Industry leading value-creation for our shareholders - Positive EVA over the cycle n Improve operating capabilities - Value-creating throughput increases of 2 Mtpa - 20% reduction in HRC/billet cash cost by 2007 n Build a high performance culture - Create an environment that generates true employee pride & attracts, develops & retains top-performing people n Be a responsible corporate citizen Be among the most admired SA companies 31

Throughput Strategy n Increase production by ~1 Mtpa by end 2007 with modest capex - 325 ktpa – 2 new DRI kilns at Vanderbijlpark by 1 H/06 (R 432 m) - 660 ktpa – efficiency improvements by 2 H/06 n Utilise opportunities to increase throughput by further ~1 Mtpa with capital expenditure - Expand sinter capacity at Vanderbijlpark by 2 H/06 (R 460 m) - 445 ktpa – Blast furnace D reline at Vanderbijlpark by 2 H/06 - Additional DRI kilns at Vanderbijlpark (R 600 m) - 355 ktpa – Blast furnace C reline at Vanderbijlpark by 2009 n Rationalisation of other facilities to follow 32

Operating Cost – HRC operating cost US$/t FOB – Q 1/04 500 450 400 Vanderbijlpark US$/t 256 350 300 Saldanha US$/t 247 250 200 150 100 50 0 International HRC producers Source: Metal Bulletin Research 33

Operating Cost – Billet operating cost US$/t FOB – Q 1/04 500 450 400 350 Newcastle US$/t 228 300 250 200 150 100 50 0 International billet producers Source: Metal Bulletin Research 34

Cost Reduction Strategy n To maintain our position in the lowest cost quartile n Initiatives aimed at 43– 58 US$/t HRC/billet cash cost reduction by 2007 - 23 – 31 US$/t from operating efficiency improvements - 13 – 20 US$/t from raw materials & procurement initiatives - 4 US$/t from increased labour productivity - 3 US$/t from Newcastle PCI project 35

DTI & Developmental Pricing n Progress - All price comparison data supplied - Cost benchmarking data analysed. Discussion with the DTI n Developmental pricing principles - Price rebate structure in place to support downstream industry (R 450 mpa) - Value added steel manufactured product exports Value added steel manufactured product import replacement - Domestic price parity to be inline with domestic prices elsewhere in world to ensure local competitiveness on an equal base with manufacturers globally - Base prices for all steel commodities to reflect market trends, while all other extras in the price composition to 36 be cost &

Mittal Steel n December 2004: LNM Holdings and Ispat International merge to form “Mittal Steel Company NV” - Listed on NYSE & Euronext Amsterdam n Merger creates the world’s most global steel company - 14 operations on four continents, 45 nationalities, 165 000 employees n Forthcoming acquisition of US-based International Steel Group will create world’s largest steel company - 64 Mtpa capacity “Shaping the future of steel” 37

Mittal Steel n Renamed company has developed a new corporate identity - Create a globally admired brand - Single, universal identity for the group n All subsidiary companies will be rebranded & renamed ‘Mittal Steel’, but differentiated by location The new name for steel 38

Name Change n Ispat Iscor to be renamed ‘Mittal Steel South Africa Limited’ subject to regulatory and shareholder approval n Commence trade under new name before end March 2005 - New ISIN: ZAE 000064044 - New JSE share code: MLA Member of the world’s most global & largest steel company 39

Outlook for Q 1 2005 n Business environment to remain optimistic - Strong steel demand in local market to continue - Local prices to be slightly lower due to price adjustment announced - Strong Rand to affect export earnings - Volumes in line with previous quarter n Earnings - To remain strong, in line with Q 4/04, though impacted slightly by lower domestic prices Stable outlook 40

Facts in Summary n Planned environmental spend of R 964 m n All operations ISO 14001 certified n Culture of cost control well entrenched in organisation n Direct rebates of R 450 m for promoting secondary exports & import substitutions n Contribution of R 45 m to SAISI to promote exports n R 15 m towards recycling through Collect-a-Can n R 4. 5 bn contribution to state treasury n US$1. 2 bn gross export revenue n ABE procurement of R 1 bn 41

annual results for the 12 months ended december 2004 (formerly Iscor Limited) A member of Mittal Steel Company